The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) dropped by $3.75/mt to $423.75/mt cfr on Thursday as buyers, wary of a weak lira, retreated from the market.
Still, most suppliers have become bullish after a flurry of cargo sales from the US, UK, and Europe to Egypt, Vietnam, and Taiwan in the past 10 days accounted for nine cargo sales from origins that Turkish mills would typically tap for supply. Brazil and Mexico are also in the market for US East and Gulf Coast cargoes, which will further impact cargo availability to Turkey.
Egypt has booked six cargoes over the past week; three from the US, one from the UK, and two from Europe at US-grade HMS 1&2 (80:20) price levels of $430-433/mt cfr. Vietnam has booked three bulk cargoes, two of which have been sourced from Europe. And Taiwan has booked a cargo from the US Gulf Coast.
Turkish mills had hoped that the country’s central bank would lower interest rates today and in turn spur domestic rebar sales. However, rates were kept flat, which added some weakness to the lira and created some uncertainty on the country’s near-term economy.
Still, strong export sales and rising prices, with export rebar offer now at $650-660/mt fob, have added to scrap suppliers’ bullish sentiment.
Turkish mills have indicated that they feel $420-425/mt cfr is an achievable heavy melt price for them this week.
Asian bulk markets rose this week on strong demand from Vietnam with heavy melt offers to Vietnam now at $465-470/mt cfr, and bids at $460-465/mt cfr. South Korea, Bangladesh, and Malaysia are also in the market for cargoes.